The holidays are an important time for all of retail. But for small businesses, they’re vital to survival.
Two out of three small businesses say the peak season is critical to their financial health. In the retail sector, the number is even higher, with 89 percent of small stores saying the year-end shopping period is key to meeting their numbers, according to the Amex Small Business Trendex: Holiday Edition, a study from American Express.
“The final months of the year are especially critical to ensure small businesses meet their revenue goals for the full-year,” said Anna Marrs, group president of global commercial services and credit and fraud risk. “From embracing AI and social media to hire and attract new customers, to using these tools to boost growth, small businesses are finding ways to set themselves up for success.”
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Small players must be resourceful to set themselves apart from bigger national and multinational companies. Amex’s September/October survey of 550 U.S. small businesses showed that 50 percent see new customer acquisition as their top objective this holiday season. But even more small retailers, 71 percent, reported that increasing sales is their No. 1 priority.
In order to achieve their goals, small businesses are turning to social media. More than three-quarters of survey-takers are planning to increase their marketing during the holidays, with a focus on Facebook (82 percent), Instagram (63 percent) and YouTube (48 percent). Fifty-eight percent said they plan to use social channels to reach new millennial shoppers, while 40 percent will target Gen Z.
Social media will also be an essential hiring tool. Twenty-nine percent of SMBs are planning to hire seasonal workers this year, and Gen Z and millennial-owned businesses are the most likely to do so using online channels (42 percent). One-fifth of those planning to hire said social media will be their primary method for reaching potential workers, including 27 percent of businesses owned by younger demographics.
Small businesses will also use artificial intelligence, or AI, to sell and serve shoppers during the Holiday 2023 season. One-quarter will look to AI tools through the end of the year, and 39 percent believe they’ll see tangible benefits. The numbers are even higher for millennial owners, 36 percent of whom will use AI, and Gen Z owners, who are especially bullish at 50 percent.
“We have already started using AI in our social media and communications efforts,” said American Express customer, small business owner and host of TV show “LiftOff with Jeanniey Walden” Jeanniey Walden, adding, “AI is a cost-effective way to help build business and manage customer experiences.”
“There are so many administrative activities that small business owners must master, and AI is making it easier for owners to prioritize their time where they should: on the customer,” she said.
The trend will continue on beyond the holiday season, with 41 percent of business owners saying they are “generally” prioritizing AI as a part of their business strategies. That’s a 7 percent overall increase from American Express’ July business survey. Larger small businesses demonstrated 23 percent more interest in AI, while Gen Z and millennial-owned small businesses reported an 11 percent increase.
